EVs a threat or opportunity? Leaders weigh in

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The consensus is that electric vehicles represent a new opportunity for the automotive aftermarket. But change may be happening too fast for the industry to keep up and therein lies the threat, experts warned.

“I really think EVs are opportunities,” Todd Campau, associate director of aftermarket solutions at S&P Global.

However, he noted that it’s still very early in the process. “I think it’s different, absolutely. But I don’t buy the story that EVs are going to be really, really bad for that aftermarket.”

There just isn’t enough known on the repair side of things. Look at Tesla, the top EV manufacturer. It doesn’t want to share any information about the maintenance and repair of its vehicles.

“So as you start to see the more mainstream manufacturers come into play, I think you’re going to see that the maintenance and repair for those vehicles is going to be different,” Campau said at the MEMA Aftermarket Suppliers Vision Conference in April.

“But I think there will still be opportunities. The repairs are likely going to be a lot more expensive. The number of repairs may not be as high as we have with internal combustion. But I think there’s going to be opportunity and there’s going to be revenue. I think calibrating and maintaining sensors is a huge opportunity for somebody to dive into.”

Bret Jordan, managing director at consultancy firm Jefferies, agreed. He’s spoken with someone in Norway and they told him there are significant problems around corrosion.

“They said that eight-year-old Teslas look like money because there’s a lot going on underneath that car or within that car,” he said during the session 3 Dragons: A View from an Economist, Wall Street Analyst and Aftermarket Analyst. “There’s more hose in the battery electric vehicle around HVAC, heating and cooling, than there is an internal combustion. So the product mix is going to change.”

He pointed to the extra weight EVs carry compared to internal combustion engine vehicles. There’s more torque that will wear down undercar components.

Yes, there will be a loss of oil changes and spark plug changes. The amount of opportunities will shrink. That will change the landscape of the repair industry.

“I think it’s going to consolidate the service providers in the sense that there’s a lot of independent garages out there that are not able to be working on a battery electric vehicle,” he said at the Chicago event.

He added on to Campau’s comments about sensors. “I think complex electronics are probably a big piece of the aftermarket going forward, whether it’s ICE or BEV, because there isn’t a fantastic storage of 10-year-old sensors out there,” he said. “And as those fail, somebody’s going to have to address that market.”